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The most uniform characteristic of the 2012 crop was its jaw-dropping variability.
Although some farmers face major financial setbacks, most yields fell short of worst-case scenarios. But fighting downed cornstalks, plugged combines, and harvest fires were only the initial hurdles.
“The more stress the crop is under, the more stress producers will have,” says Chad Hart, Iowa State University Extension ag economist. “They’ll have to give more time and thought to managing this year’s harvested crop.”
Beyond the striking variability of this year’s corn yields, two other characteristics were initial sources of concern.
Test weight/kernel size
Despite earlier worries, there were relatively few reports of test weights triggering major discounts. “Test weight wasn’t a huge factor,” says Kim Holsapple, grain manager and merchandiser for Total Grain Marketing, Effingham, Illinois. “Most of our corn averaged about 56 pounds.” In southeast Kansas, low test weight corn (less than 50 pounds per bushel) was reported. “I’d say the vast majority was above 50 pounds per bushel, maybe even above 52,” says Doug Shoup, Kansas State University Extension specialist, Chanute.
Bob Nielsen, Purdue University agronomist, isn’t surprised. “Low test weight corn doesn’t have anything to do with yield,” he says. “The higher the moisture, the lower the test weight.”
Hart says they fielded many reports of corn being 16% to 18% moisture when combining got started. And then 50 feet down the row, it was up to 22% to 24%.
“Many elevators recognized these quality issues and went out of their way to help,” he says. “Some elevators in northern Iowa cut drying rates by one half to encourage early harvest.”
The advantages of this incentive were twofold:
Drought- and wind-damaged downed corn posed harvesting and marketing headaches for farmers and grain handlers.
Heat, drought, and wind damage created the perfect breeding ground for aflatoxin and other molds. “An early harvest gave producers the chance to catch it, stop the growth, and keep it at manageable levels,” Hart says.
Drying the crop to consistent levels prior to storage is key. “Corn with any potential for aflatoxin can’t be dried below 120°,” says Iowa State University professor Charles Hurburgh, who heads the Iowa Grain Quality Initiative. “Drying it in half batches helps. In cases of highly variable moisture, for example from 15% to 30%, dryers won’t equalize moisture in one pass.”
Holsapple adds, “With prices extremely high at harvest, many producers sold right out of the field. Some didn’t want to take the chance of storing it in their bins at 15 parts per billion of aflatoxin and finding out later this winter that the level was up to 200. We closed a little early some days so we could quickly dry down everything hauled in that same day.”
Iowa was the first of several states to petition the FDA to permit corn with more than 20 parts per billion (ppb) of aflatoxin to be blended with corn with lower levels or no aflatoxin for use as animal feed. This allowed corn to be marketed to feed mills and fed safely to livestock.
“Normally, this corn would be segregated and then marketed separately,” Hart says. “Blending opened up feeding opportunities and lessened the price impact on producers. If you can maintain greater flexibility in marketing, then you can better maintain price levels.”
Grain dealers and state ag departments signed a compliance agreement prior to blending. Each batch of blended corn is analyzed to determine its aflatoxin level according to GIPSA procedures, and this report is provided to buyers of the blended corn.
Indiana, Nebraska, Illinois, and Kansas also received permission to blend corn with more than 20 ppb of aflatoxin.
“There’s plenty of corn this year without it, so blending it isn’t difficult to do,” says Corinne Alexander, Purdue University ag economist.
Corn containing aflatoxin levels greater than 500 ppb can’t be blended.
“Levels of aflatoxin were lower in 2012, compared to 2011,” says Doug Jardine, Kansas State University plant pathologist. “Less than 10% to 15% of samples tested over 100 ppb. Most elevators accept corn at this level without penalty. Less than 5% tested over 300 ppb.”
At the Cargill wet milling complex in Eddyville, Iowa, Ray Jenkins, senior grain merchandiser, says, “A lot of the problem is solved by getting grain to the right market.” (See table above.)
Dairy cows are the least tolerant. Lactating cows excrete 1% to 2% of the aflatoxin consumed in their feed into their milk. The FDA doesn’t allow milk with over .5 ppb to be used for human consumption.
The screening and testing of milk for aflatoxin residues is required in some states, including Iowa and Illinois. In other states, testing is recommended.
Beef steers can consume up to 300 ppb of aflatoxin.
But aflatoxin knocked ethanol plants out of the market equation because it concentrates by a factor of three in dried distillers’ grain (DDG).
The Cargill wet mill facility in Eddyville processes corn gluten feed products for pet food and cattle. Its threshold is 10 ppb.
In a typical day at the harvest peak, Jenkins estimates that 20 to 30 truckloads were tested, and three to 10 loads were rejected. “The level of aflatoxin here has been more like a headache than a heart attack,” he says.
In most cases, aflatoxin was a local issue, and sales were negotiated off the grid. Producers delivering corn over allowable limits were offered a list of local buyers, mostly livestock producers.
“They handled sales on their own,” Jenkins says. “Early on, some buyers thought they’d get $4-per-bushel corn. But aflatoxin was less than expected, and that didn’t happen.”
At the wet mill, testing was done on multiple platforms. “Some corn that glows doesn’t have it; other corn that doesn’t glow has it,” he says. “We have a multiple line of defense, testing both inbound corn and outbound feed.”
Other markets, such as dry mill ethanol plants, stretched gradient scales up to pretty high levels to accommodate grain. Some feed mills accepted corn with levels of 100 to 150 ppb of aflatoxin.
In Illinois, the drought was devastating from I-70 on south. The state’s aflatoxin epicenter covered the area from Bloomington east to Hoopston and then south from Shelbyville to Mattoon.
Total Grain Marketing has facilities in 13 Illinois counties. “Percentagewise, we didn’t find many loads with aflatoxin,” Holsapple says. “But a lot of producers tested it in the field for insurance reasons, and if they had it, they didn’t haul it to town. You can feed hogs up to 100 ppb, and we have several large producers, so it worked into the system through appropriate marketing channels.”
A study by South Dakota State University indicates that, contrary to conventional wisdom, the feed value of corn and cattle performance may not be affected adversely by low test weight corn. A metabolism trial using cattle determined that energy values for corn with a test weight of 41 pounds were no different than energy values for corn with a test weight of 54 pounds. Trials in Nebraska with growing and finishing cattle also reinforced these results.
“Cattle feeders who grow corn may want to sell corn that’s higher in test weight and hang on to the lighter test weight corn for cattle feed, avoiding or reducing discounts,” says Warren Rusche, South Dakota State University Extension cow/calf field specialist.
For cattle feeders who need to purchase corn, he says the new research may offer an avenue for reducing feed costs.
Selling a crop that dried down in the field at the same time prices were escalating simplified marketing for many.
“What happens in a typical short crop year is prices tend to peak early and then decline the rest of the marketing year,” Alexander says. “Storage may not be profitable for either corn or soybeans.”
She adds, “For corn, market signals to sell aren’t as strong as soybeans. There’s no carry in the market. If producers have any quality issues that may result in dockage, it makes sense to deliver corn from the field and not worry about it.”
For producers who feed their crop or have contracts with food or ethanol processors specifying a later delivery date, storage is a given.
But Alexander says storing grain in 2012-2013 is a risk-management issue.
“Looking at the big picture in a short-crop year, every kernel matters,” Alexander says. “We can’t afford to throw it away, as long as we find ways to use it safely. This is a year to think about grain conditions and to do everything right in storage. Once it goes into the bin, producers are 100% on their own to protect it from damage. Postharvest losses aren’t covered by crop insurance.”
More grain than usual was harvested in September, when temperatures were warmer. Higher populations of grain-damaging bugs were reported due to warmer temperatures, along with a high level of broken kernels and fine material.
“When harvest temperatures are over 75°F., grain is high moisture, mold is common, and insects are still active,” Alexander says.
Richard Stroshine, Purdue University grain quality specialist, suggests that corn without aflatoxin (21% moisture or below) can be dried in the bin using layer drying as a technique to accelerate the drying rate.
Grain is added to the bin in layers during continuous drying. “The first layer will dry faster than normal. And by the time you put your second layer in the bin, you’ll have gotten some field drydown of that grain, which should save some in-bin drying time,” he says.
“If you don’t remove fine material from corn before you place it in the bin [whether for drying or storage], you’ll need to core your bin,” he adds. “Fine materials tend to concentrate in the center of the bin. To core the bin, open the center well, pull out a load, and you should get a lot of those fines out. If your grain is peaked, level the top surface, which is important for good aeration.”
Caution: Out-of-condition grain is a major risk factor in grain-bin entrapments and engulfments.
Export market impact
Will U.S. crop-quality issues have repercussions in global markets?
Safety standards for U.S. corn are the same for domestic and export shipments. Any graded grain (such as No. 2 or No. 3 U.S. corn) only can contain 20 ppb aflatoxin or less for export. DDG importers can require aflatoxin tests and set specific limits in their purchase contracts.
“Once grain comes out of storage for export, there’s mandatory GIPSA testing,” Hurburgh says. “We may see aflatoxin pop up from time to time.”
Editor's Note: Look for this story and more in the special mid-November Marketing Issue of Successful Farming magazine due out soon!